Designing GDPP growth (2017)
I’m part of a team that’s currently working with some extremely smart, capable and successful business leaders here in New Zealand on something important — doubling the rate of growth of GDP per person in New Zealand through Innovation over the next five years (provisionally naming our project the ‘Strategic Insights Panel’). Why choose such an audacious — some might say unattainable, goal? Well, delivering on it generates three principle outcomes — all of which might be described as transformational for our country:
- It reduces the time taken to double the nation’s standard of living from three generations to one generation
- It facilitates the diversification of our economy, making us more resilient to external commodity shocks
- It creates a virtuous cycle of inter-connectedness across both our Asia-Pacific region and globally through technology, capital and people.
…these are all important elements for us to address, both as a nation and as individual New Zealand businesses, for reasons discussed in previous posts (Note: As you’ll see, I’ve structured this first Strategic Insights Panel post broadly in line with the project’s own timeline, sharing information and reflections accordingly).
Why have we been lucky enough to help realise such a project? Well, ASB the bank I work for has a very strong brand both in terms of innovation and ‘societal well-being’ (we just ranked third best for reputation across all of New Zealand’s large corporate/institutional businesses, behind Air New Zealand and Toyota).
…we’re also the youngest of the ‘big four’ banks here in terms of business/corporate banking, and so are actively developing strategies to engage in longer term conversations across this segment of the market. These elements all combined well, resulting in a green light for the proposed project.
And, to help us succeed, we’re working with our great partners KPMG on account of their experience in developing social cohesion initiatives, and in enabling networks of innovation.
Context
There’s a really strong, unifying “New Zealand Inc.” mindset here in the country on account of us being pretty small and geographically remote (just under 5m of us at present, and the last country you stop at in the Eastern Hemisphere on the way through to Antarctica). Both of these factors had a limiting impact on us historically, but that’s not so much the case any longer — we’re the world’s most connected citizens, and the most diverse culturally, all using the highest amount of non-physical money in the OECD. Facebook etc. even use us to test new services and functionalities on account of our tech-savviness.
Now, using our developing connections with the rest of the Asia-Pacific region (after having primarily been a protein-based commodity manufacturer for Great Britain), we’re both itching to get out to show what New Zealand can do on the world stage, and working to get back towards the top of the OECD’s GDP per person (GDPP being a primary accepted measure of economic health of a country) metrics. The GDPP thing for us is quite a big deal on account of New Zealand being a very egalitarian place. In 1960, New Zealand’s GDPP was ~5th globally. We’re now in ~20th place. We recognise it’ll be hard to get back to where we were (particularly given our relatively low productivity rate — see data below), but try we must.
How did we start?
Our initiative started by inviting 25 CEOs, directors and board members from both New Zealand’s ‘large’ and ‘fast scaling’ businesses to our inaugural event at the end of last year to ask them if they’d own, define and help to achieve the GDPP challenge with us (ASB and KPMG). To their great credit, they universally said yes in about ten seconds. To keep things moving apace, we then collectively agreed on the foundational components:
Our mandate — to “Create a better New Zealand, for our family and our whanua” (extended family and ‘people’ generally)
Our measures — to double the annual rate of growth of GDPP per annum from ~1.5% to ~3.0% within five years, bringing it more into line with (although still less than) Australia and our other ‘small, developed nation” competitors like Israel, Denmark and Singapore
Our cadence — a plan to hard-schedule sessions with the collective group in every six months
Our projects — or the tangible work that we believed would help to move the dial. After some debate, these were agreed as:
- 1) Creating an Office of the Chief Technology Officer for New Zealand. This was envisioned as a primarily business-community driven initiative, working in partnership with government to “augment and complement central government policy to take advantage of rapid technological change and sustain our place in the world economy”. A number of other small, agile and technologically advanced nations (Singapore, for example — see link below) have similar positions that successfully perform the kinds of functions that we believe would help to drive the right outcomes for New Zealand.
- 2) Creating a world-class Talent Platform to enable New Zealand businesses to access, train and recruit New Zealanders with the kinds of ‘future ready’ skills that are required in an era of increasing complexity, ambiguity and technological focus. In addition to helping our corporate businesses, this workstream is also intended to help “enable technology-based business within New Zealand to stay and grow” (note: our cohort of leaders agreed with others globally that ‘access to the right talent’ is the most pressing issue they face). The Talent Platform may exist as a number of interrelated elements, both physical and digital. A key focus of the platform will exist both on training for specialist vocational skills, and on changing the current relationship between ‘earning and learning’, to one that is more fluid — for example, being initially trained and employed to perform the simpler functions of a Tester, whilst also training to become a more valuable and higher salaried Developer.
- 3) Creating a well integrated and collaborative ecosystem to “help innovative New Zealand businesses grow and scale, by connecting them to a strong network to support the flow of local and international knowledge, ideas and capital”. We know that for smaller countries (and sub-sections of larger countries) to perform well in terms of driving and sustaining material levels of innovation, capital and ideas need to flow freely across a network with aligned goals (see New Zealand Productivity Commission and NZBIE data in earlier posts). New Zealand performs relatively poorly in this regard on account of fragmentation and misalignment. Israel, on the other hand is an excellent example of an ecosystem that performs well. (Note: it is acknowledged that a perception exists that New Zealand does not currently have sufficient amounts of growth capital available to support fast-scaling businesses; the challenge to help understand and/or help address this is included as a component of this project).
…once agreed, members of this initial cohort even put their hands up to act as business owners and ‘managers’ for each of the projects. This ‘action-oriented’ feeling was outstanding, and certainly something we wanted to maintain.
What did we do next?
Our first session certainly felt like the ‘forming’ and initial ‘storming’ stages of a delivery cycle. However, in addiiton to more ‘storming’, we also understood there was a good deal of subsequent work required to prepare the ground for ‘norming’ (i.e. getting a solid operating rhythm together). As such, we named our newly proposed second session the ‘doing session’ (this was completed some three months ago at the time of writing). Then, after going our separate ways, we followed up over subsequent weeks with comms and project updates to cohort members so as not to lose momentum.
What did we learn?
- Immediately after the initial session, we learned that translating high-level strategic statements into detailed ‘doing projects’ that people can buy into in a shared way can be hard. It takes tenacity, a preparedness to be flexible, and an ability to live with ambiguity for quite a while. Since this first Strategic Insights Panel, we’ve gone quite a way in terms of defining the details of each project, but there’s still a way to go. Each will continue to evolve and be defined in ever-more granular detail over the coming months
- We learned that we need money and people to move things forwards — but for the right initiatives that resonate, we also learned that each of these is available
- We learned that the boring stuff — strong project management and status updates, is critical
- We learned that 100% verbal agreement isn’t always required, and that seeking it at times when it isn’t required, simply slows things down. This ‘when you engage, you steer’ approach works well in circumstances where stakeholders are extremely busy, but it requires frequent, short updates to everyone, allowing them to step in as/when they feel the need
- We learned that demand genuinely appears to exist for initiatives of this kind across industries and executive levels. The crackle in the air at the end of this first session was palpable
- We learned that the overall shape, market identity and value-proposition of our initiative will morph and mature over time. It currently feels like we need some kind of ‘charter’ for cohort members to sign up to, as well as a ‘place’ (online or offline) that interested external parties can go to in order to engage with both the group and each initiative.
Since the first session, we’ve certainly worked hard to ensure that our learnings are fully incorporated into the project in some way — they were too hard-won not to. They’ve helped us with our second session, but not to the extent that they made life drastically easier overall. Why? Well, for the simple reason that our second session produced some additional and different challenges that we’re also in the process of solving. I’ll identify these, plus additional reflections in ‘Part Two’.
In the meantime, many thanks once again to our outstanding cohort members (including ASB and KPMG teams). Each person is generous with their time, passionate, extremely intelligent, and flexible in their thinking. I’m learning a great deal in every one of my engagements, and look forward to continuing to meet and talk with everyone.
I’m also happy to say that very recently, the Strategic Insights Panel has received some great press — most notably in New Zealand’s ‘National Business Review’.
